DiNapoli Discovers Health Department Overpaid Hospitals by $7.8M

An audit released Thursday by New York State Comptrollers Thomas DiNapoli shows The State Department of Health improperly paid hospitals $7.8 million for lengthy acute care admissions because hospitals billed Medicaid for higher levels of care than was actually delivered to patients.

DOH uses a contractor, the Island Peer Review Organization, to review paid inpatient claims. In coordination with DOH, DiNapoli’s auditors requested the organization review a sample of 297 hospital stays that were billed by ten hospitals for patients admitted for 50 or more days for high levels of care, instead of the less costly “alternate level of care,” or ALC.

Based on the organizations review, 94 of the claims, costing the state $10.6 million, were improperly billed primarily because the hospitals should have billed for the ALC care that was actually provided. The Island Peer Review organization concluded that the state should have only paid $2.8 million for these claims and that Medicaid had overpaid the claims by $7.8 million. DiNapoli recommended that the DOH Recover the $7.8 million in inappropriate payments.

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